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Item 1. Financial Statements

2024-11-07 compared with 2024-08-09 · 179 added, 170 removed, 274 unchanged (56% of the section changed)

3 unchanged sentences

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Income from net profits interest

Cash on hand withheld for Trust expenses

Cash on hand used (withheld) for Trust expenses

General and administrative expenses (1)

Distributable income

Distributions per Trust unit (17,000,000 Trust units issued and outstanding at June 30, 2024 and 2023)

Includes $31,215 and $30,014 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended June 30, 2024 and 2023, respectively, and $61,229 and $58,874 during the six months ended June 30, 2024 and 2023, respectively.

Also includes $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three-month periods ended June 30, 2024 and 2023 and $75,000 during each of the six-month periods ended June 30, 2024 and 2023.

Distributions per Trust unit (17,000,000 Trust units issued and outstanding at September 30, 2024 and 2023)

(1) Includes $31,215 and $30,014 paid to VOC Brazos Energy Partners, LP (“VOC Brazos”) during the three months ended September 30,

2024 and 2023, respectively, and $92,444 and $88,888 during the nine months ended September 30, 2024 and 2023, respectively.

includes $37,500 paid to The Bank of New York Mellon Trust Company, N.A.

during each of the three months ended September 30, 2024

and 2023 and $112,500 during each of the nine months ended September 30, 2024 and 2023, respectively.

STATEMENTS OF ASSETS AND TRUST CORPUS

September 30,

Cash and cash equivalents

3 unchanged sentences

(128,648,342 )

Trust corpus, 17,000,000 Trust units issued and outstanding at June 30, 2024 and December 31, 2023

Trust corpus, 17,000,000 Trust units issued and outstanding at September 30, 2024 and December 31, 2023

STATEMENTS OF CHANGES IN TRUST CORPUS

Three months ended

Six months ended

September 30,

Nine months ended

September 30,

Trust corpus, beginning of period

1 unchanged sentence

Cash distributions

(11,390,000 )

Trust expenses

2 unchanged sentences

The accompanying notes are an integral part of

these financial statements.

these condensed financial statements.

VOC ENERGY TRUST

4 unchanged sentences

to a Trust Agreement dated November 3, 2010 (as amended and restated on May 10, 2011, the “Trust Agreement”) among

VOC Brazos Energy Partners, L.P., a Texas limited partnership (“VOC Brazos”), as trustor, The Bank of New York Mellon Trust

Company, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee (the “Delaware Trustee”).

VOC Brazos Energy Partners, L.P., a Texas limited partnership (“VOC Brazos”), as trustor, The Bank of New York Mellon

Trust Company, N.A., as Trustee (the “Trustee”), and Wilmington Trust Company, as Delaware Trustee (the “Delaware Trustee”).

The Trust was created to acquire and hold a term net profits interest for the benefit of the Trust unitholders.

26 unchanged sentences

wind up its affairs and terminate.

As of June 30, 2024, cumulatively, since inception,

the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’

interest from the sale of 8.9 MMBoe of production

from the underlying properties (which is the equivalent of 7.1 MMBoe (unaudited) in respect of the net profits interest).

As of September 30, 2024, cumulatively, since

inception, the Trust has received payment for 80% of the net proceeds attributable to VOC Brazos’

interest from the sale of 9.0

MMBoe of production from the underlying properties (which is the equivalent of 7.2 MMBoe in respect of the net profits interest).

The Trustee can authorize the Trust to borrow money

8 unchanged sentences

Corpus as of December 31, 2023, which has been derived from audited financial statements, and the unaudited interim financial statements

as of June 30, 2024 and for the three- and six-month periods ended June 30, 2024 and 2023, have been prepared pursuant to the

rules and regulations of the Securities and Exchange Commission (the “SEC”).

Accordingly, certain information and note

disclosures normally included in annual financial statements have been omitted pursuant to those rules and regulations.

as of September 30, 2024 and for the three- and nine-month periods ended September 30, 2024 and 2023, have been prepared pursuant

to the rules and regulations of the Securities and Exchange Commission (the “SEC”).

Accordingly, certain information

and note disclosures normally included in annual financial statements have been omitted pursuant to those rules and regulations.

The preparation of financial statements requires

20 unchanged sentences

The actual cash distributions of the

Trust will be made based on the terms of the conveyance creating the Trust’s net profits interest.

Trust will be made based on the terms of the conveyance that created the Trust’s net profits interest.

Expenses of the Trust, which

16 unchanged sentences

There was no impairment of the investment in the net profits interest

during the quarters ended June 30, 2024 or 2023.

during the quarters ended September 30, 2024 or 2023.

No new accounting pronouncements were adopted or

issued during the quarter ended June 30, 2024 that would impact the financial statements of the Trust.

issued during the quarter ended September 30, 2024 that would impact the financial statements of the Trust.

Investment in Net Profits Interest

12 unchanged sentences

Three months ended

Six months ended

Excess of revenues over direct operating expenses and

lease equipment and development costs (1)

September 30,

Nine months ended

September 30,

Excess of revenues over direct operating expenses and lease equipment and development costs (1)

Times 80% net profits interest to Trust

Income from net profits interest before reserve

VOC Brazos reserve for future development,

maintenance or operating expenditures (2)

Income from net profits interest before reserve adjustments

VOC Brazos reserve for future development, maintenance or operating expenditures (2)

Income from net profits interest (3)

(1) Excess of revenues over direct operating expenses and lease equipment and development costs reflect expenses and costs incurred by

VOC Brazos during each of the December through February production periods for the three months ended June 30 and during

each of the September through February production periods for the six months ended June 30.

Pursuant to the terms of the

conveyance of the net profits interest, lease equipment and development costs are to be deducted when calculating the distributable income

to the Trust.

VOC Brazos during each of the March through May production periods for the three months ended September 30 and during each

of the September through May production periods for the nine months ended September 30.

Pursuant to the terms of the conveyance

of the net profits interest, lease equipment and development costs are to be deducted when calculating the distributable income to the

(2) Pursuant to the terms of the conveyance of the net profits interest, VOC Brazos can reserve up to $1.0 million for future development,

maintenance or operating expenditures at any time.

During the three months ended June 30, 2024 and 2023, and the six months ended

June 30, 2024 and 2023, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the reserve.

balance was $1.0 million at June 30, 2024 and 2023.

During the three months ended September 30, 2024 and 2023, and the nine months

ended September 30, 2024 and 2023, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the reserve.

reserve balance was $1.0 million at September 30, 2024 and 2023.

(3) The income from net profits interest is based upon the cash receipts from VOC Brazos for the oil and gas production.

1 unchanged sentence

thus, the cash received by the Trust during the three

months ended June 30, 2024 substantially represents production by VOC Brazos from December 2023 through February 2024,

and the cash received by the Trust during the three months ended June 30, 2023 substantially represents production by VOC Brazos

from December 2022 through February 2023.

The cash received by the Trust during the six months ended June 30, 2024

substantially represents production by VOC Brazos from September 2023 through February 2024, and the cash received by the Trust

during the six months ended June 30, 2023 substantially represents production by VOC Brazos from September 2022 through February 2023.

For the three and six months ended June 30,

months ended September 30, 2024 substantially represents production by VOC Brazos from March 2024 through May 2024, and

the cash received by the Trust during the three months ended September 30, 2023 substantially represents production by VOC Brazos

from March 2023 through May 2023.

The cash received by the Trust during the nine months ended September 30, 2024 substantially

represents production by VOC Brazos from September 2023 through May 2024, and the cash received by the Trust during the nine

months ended September 30, 2023 substantially represents production by VOC Brazos from September 2022 through May 2023.

For the three and nine months ended September 30,

2024 and 2023, MV Purchasing, LLC, an affiliate of VOC Brazos, purchased a significant portion of the production of the underlying properties.

13 unchanged sentences

From the first quarter of 2022 to the second quarter of 2023, the Trustee withheld a portion of the proceeds otherwise available

for distribution each quarter to gradually build a reserve of approximately $1.175 million for the payment of future known, anticipated

or contingent expenses or liabilities of the Trust.

The Trustee may increase or decrease the targeted amount at any time and may increase

or decrease the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders.

Cash held in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or

provide for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders,

together with interest earned on the funds.

This cash reserve is included in cash and cash equivalents on the accompanying Statements

of Assets and Trust Corpus.

for distribution each quarter to build an approximately $1.175 million cash reserve for the payment of future known, anticipated or contingent

expenses or liabilities of the Trust.

The Trustee may increase or decrease the targeted amount at any time and may increase or decrease

the rate at which it is withholding funds to build the cash reserve at any time, without advance notice to the unitholders.

in reserve will be invested as required by the Trust Agreement.

Any cash reserved in excess of the amount necessary to pay or provide

for the payment of future known, anticipated or contingent expenses or liabilities eventually will be distributed to unitholders, together

with interest earned on the funds.

This cash reserve is included in cash and cash equivalents on the accompanying Statements of Assets

and Trust Corpus.

The first quarterly distribution during 2024 was

3 unchanged sentences

$3,060,000, or $0.18 per Trust Unit, and was made on May 15, 2024 to Trust unitholders owning Trust Units as of April 30, 2024.

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2024 through March 31, 2024.

Such distribution

included the net proceeds of production collected by VOC Brazos from January 1, 2024 through March 31, 2024.

The third quarterly distribution during 2024 was

$3,060,000, or $0.18 per Trust Unit, and was made on August 14, 2024 to Trust unitholders owning Trust Units as of July 30, 2024.

Such distribution included the net proceeds of production collected by VOC Brazos from April 1, 2024 through June 30, 2024.

The first quarterly distribution during 2023 was

6 unchanged sentences

Such distribution included the net proceeds of production collected by VOC Brazos from January 1, 2023 through March 31,

The third quarterly distribution during 2023 was

$3,570,000, or $0.21 per Trust Unit, and was made on August 14, 2023 to Trust unitholders owning Trust Units as of August 1,

Such distribution included the net proceeds of production collected by VOC Brazos from April 1, 2023 through June 30,

Advance for Trust Expenses

1 unchanged sentence

is allowed to borrow money to pay Trust expenses.

During the three and six months ended June 30, 2024 and 2023, there were no borrowings

or amounts owed for money borrowed in previous quarters.

Under the terms of the Trust Agreement, VOC Brazos has provided a letter of credit

in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future

During the three and nine months ended September 30, 2024 and 2023, there were

no borrowings or amounts owed for money borrowed in previous quarters.

Under the terms of the Trust Agreement, VOC Brazos has provided

a letter of credit in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient

cash to pay future expenses.

Subsequent Events

On July 18, 2024, the Trust announced a Trust

distribution of net profits for the quarterly payment period ended June 30, 2024.

Unitholders of record on July 30, 2024 will

receive a distribution amounting to $3,060,000, or $0.18 per Trust Unit, which will be paid on August 14, 2024.

On October 17, 2024, the Trust announced a

Trust distribution of net profits for the quarterly payment period ended September 30, 2024.

Unitholders of record on October 30,

2024 will receive a distribution amounting to $3,060,000, or $0.18 per Trust Unit, which will be paid on November 14, 2024.

Trustee’s Discussion and Analysis of Financial Condition

9 unchanged sentences

Results of Operations

Results of Operations for the Quarters Ended June 30,

Results of Operations for the Quarters Ended September 30,

2024 and 2023

The following is a summary of income from net profits

interest received by the Trust for the three months ended June 30, 2024 and 2023 consisting of the April distribution for each

respective year:

interest received by the Trust for the three months ended September 30, 2024 and 2023 consisting of the July distribution for

each respective year:

Three months ended

September 30,

Sales volumes:

4 unchanged sentences

Gross proceeds:

Three months ended

Natural gas sales

10 unchanged sentences

The cash received by the Trust from VOC Brazos

during the quarter ended June 30, 2024 substantially represents the production by VOC Brazos from December 2023 through February 2024.

The cash received by the Trust from VOC Brazos during the quarter ended June 30, 2023 substantially represents the production

by VOC Brazos from December 2022 through February 2023.

The revenues from oil production are typically received by VOC Brazos

one month after production.

Oil and natural gas sales were $8,076,227 for the three months ended June 30, 2024, a decrease of

$1,280,788 or 13.7% from $9,357,015 for the three months ended June 30, 2023.

Revenues are a function of oil and natural gas

sales prices and volumes sold.

The decrease in gross proceeds was due to decreases in market prices for oil and natural gas and a

decrease in oil and natural gas sales volumes, as further discussed below, during the second quarter of 2024.

During the three

months ended June 30, 2024, the average price for oil decreased 3.9% to $71.25 per Bbl and the average price for natural gas

decreased 42.3% to $3.10 per Mcf.

Oil sales volumes were 110,534 Bbls for the three months ended June 30, 2024, a decrease of

10,237 Bbls or 8.5% from 120,771 Bbls for the three months ended June 30, 2023, while natural gas sales volumes were

64,808 Mcf, a decrease of 9,836 Mcf or 13.2% from 74,644 Mcf for the same period in 2023.

These oil and natural gas sales volume decreases are partially the result of severe winter storms in January 2024 that affected Kansas

and Texas and resulted in a curtailment of production on certain of the underlying properties, as discussed in the Trust’s Current

Report on Form 8-K filed on January 19, 2024.

The snow and ice associated with those storms disabled electrical power to the affected

underlying properties for an extended period, rendering some properties inaccessible, and generally created difficult working conditions.

Lease operating expenses were $3,312,352 for the three months ended June 30, 2024, a decrease of $325,532 or 8.9% from $3,637,884

for the three months ended June 30, 2023.

Production and property taxes were $183,728 for the three months ended June 30, 2024,

during the quarter ended September 30, 2024 substantially represents the production by VOC Brazos from March 2024 through May 2024.

The cash received by the Trust from VOC Brazos during the quarter ended September 30, 2023 substantially represents the production

by VOC Brazos from March 2023 through May 2023.

The revenues from oil production are typically received by VOC Brazos one month

after production.

Oil and natural gas sales were $9,270,907 for the three months ended September 30, 2024, an increase of $30,322

or 0.3% from $9,240,585 for the three months ended September 30, 2023.

Revenues are a function of oil and natural gas volumes sold

and prices received.

The increase in gross proceeds was due to an increase in the market price for oil sales partially offset by decreases

in oil and natural gas sales volumes and the market price for natural gas sales during the third quarter of 2024.

During the three months

ended September 30, 2024, the average price for oil increased 9.6% to $78.36 per Bbl and the average price for natural gas decreased

5.8% to $2.74 per Mcf.

Oil sales volumes were 116,006 Bbls for the three months ended September 30, 2024, a decrease of 10,367

Bbls or 8.2% from 126,373 Bbls for the three months ended September 30, 2023, while natural gas sales volumes were 65,815 Mcf,

a decrease of 5,149 Mcf or 7.3% from 70,964 Mcf for the same period in 2023.

Lease operating expenses were $3,784,091 for the three months ended September 30, 2024, an increase of $230,900 or 6.5% from $3,553,191

for the three months ended September 30, 2023.

Production and property taxes were $539,469 for the three months ended September 30,

2024, a decrease of $118,015 or 17.9% from $657,484 for the same period in 2023.

Such decrease is the result of a $63,281 decrease in production

taxes, primarily due to lower sales prices, and a $32,475 decrease in property taxes.

Development expenses were $358,318 for the three

months ended June 30, 2024, an increase of $196,223 or 121.1% from $162,095 for the same period in 2023.

Such increase was primarily

due to increased development activity during the three months ended June 30, 2024, compared to the three months ended June 30,

Such decrease is the result of a decrease of $72,803

or 29.2% in production taxes due primarily to lower sales volumes for oil and natural gas and a decrease of $45,212 or 11.1% in property

Development expenses were $699,074 for the three months ended September 30, 2024, an increase of $403,103 or 136.2% from $295,971

for the same period in 2023.

Such increase was primarily due to increased development activity during the three months ended September

30, 2024, compared to the three months ended September 30, 2023.

of revenues over direct operating expenses and lease equipment and development costs .

The excess of revenues over direct operating

expenses and lease equipment and development costs from the underlying properties was $4,221,829 for the three months ended June 30,

2024, a decrease of $1,055,723 or 20.0% from $5,277,552 for the three months ended June 30, 2023.

expenses and lease equipment and development costs from the underlying properties was $4,248,273 for the three months ended September 30,

2024, a decrease of $485,666 or 10.3% from $4,733,939 for the three months ended September 30, 2023.

The Trust’s 80% net profits

interest of these totals was $3,398,618 and $3,787,151, respectively.

During the three months ended June 30, 2024 and 2023, VOC Brazos

did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve for future development, maintenance

or operating expenditures, which resulted in income from the net profits interest of $3,377,463 and $4,222,042 for such periods, respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses of $317,463 and $312,042 for the three months ended

June 30, 2024 and 2023, respectively.

The Trustee paid general and administrative expenses of $120,837 for the three months ended

June 30, 2024, a decrease of $115,028 from $235,865 for the three months ended June 30, 2023.

These factors resulted in distributable

income for the three months ended June 30, 2024 of $3,060,000, a decrease of $850,000 from $3,910,000 for the three months ended

June 30, 2023.

Results of Operations for the Six Months Ended June 30, 2024

During the three months ended September 30, 2024 and 2023,

VOC Brazos did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve for future development,

maintenance or operating expenditures, which resulted in income from the net profits interest of $3,398,618 and $3,787,151 for such periods,

respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses of $338,618 and $217,151 for the three

months ended September 30, 2024 and 2023, respectively.

The Trustee paid general and administrative expenses of $202,488 for the

three months ended September 30, 2024, a decrease of $54,732 from $257,220 for the three months ended September 30, 2023.

factors resulted in distributable income for the three months ended September 30, 2024 of $3,060,000, a decrease of $510,000 from

$3,570,000 for the three months ended September 30, 2023.

Results of Operations for the Nine Months Ended September 30,

2024 and 2023

The following is a summary of income from net profits

interest received by the Trust for the six months ended June 30, 2024 and 2023 consisting of the January and April distributions

interest received by the Trust for the nine months ended September 30, 2024 and 2023 consisting of the January, April and July distributions

for each respective year:

Six months ended

Nine months ended

September 30,

Sales volumes:

13 unchanged sentences

Income from net profits interest before reserve adjustments

Brazos reserve for future development, maintenance or operating expenditures

VOC Brazos reserve for future development, maintenance or operating expenditures

Income from net profits interest

The cash received by the Trust from VOC

Brazos during the six months ended June 30, 2024 substantially represents the production by VOC Brazos from September 2023 through

February 2024.

The cash received by the Trust from VOC Brazos during the six months ended June 30, 2023 substantially

represents the production by VOC Brazos from September 2022 through February 2023.

The cash received by the Trust from VOC Brazos

during the nine months ended September 30, 2024 substantially represents the production by VOC Brazos from September 2023 through

The cash received by the Trust from VOC Brazos during the nine months ended September 30, 2023 substantially

represents the production by VOC Brazos from September 2022 through May 2023.

The revenues from oil production are typically

received by VOC Brazos one month after production.

Oil and natural gas sales were $17,770,762 for the six months ended June 30, 2024, a decrease of $2,781,831

or 13.5% from $20,552,593 for the six months ended June 30, 2023.

Revenues are a function of oil and natural gas sales prices

and volumes sold.

The decrease in gross proceeds was due to decreases in market prices for oil and natural gas and a decrease in oil and

natural gas sales volumes, as further discussed below, during the six months ended June 30, 2024.

During the six months ended June 30, 2024, the average

price for oil decreased 2.7 % to $76.45 per Bbl and the average price for natural gas decreased 51.8% to $3.17 per Mcf.

Oil sales volumes

were 226,939 Bbls for the six months ended June 30, 2024, a decrease of 21,432 Bbls or 8.6% from 248,371 Bbls for the six months

ended June 30, 2023, while natural gas sales volumes were 132,729 Mcf, a decrease of 25,416 Mcf or 16.1% from 158,145 Mcf for the

same period in 2023.

These oil and natural gas sales volume decreases are partially the result of severe winter storms in January 2024 that affected Kansas

and Texas and resulted in a curtailment of production on certain of the underlying properties, as discussed in the Trust’s Current

Report on Form 8-K filed on January 19, 2024.

Oil and natural gas sales were $27,041,669 for the nine months ended September 30, 2024, a decrease of

$2,751,509 or 9.2% from $29,793,178 for the nine months ended September 30, 2023.

Revenues are a function of oil and natural

gas volumes sold and prices received.

The decrease in gross proceeds was due to decreases in oil and natural gas sales volumes and

in the market price for natural gas sales partially offset by a slight increase in the market price for oil sales during the nine months

ended September 30, 2024.

During the nine months ended September 30, 2024, the average price for oil increased 1.2% to

$77.10 per Bbl and the average price for natural gas decreased 44.3% to $3.03 per Mcf.

Oil sales volumes were 342,945 Bbls for the nine

months ended September 30, 2024, a decrease of 31,799 Bbls or 8.5% from 374,744 Bbls for the nine months ended September 30,

2023, while natural gas sales volumes were 198,544 Mcf, a decrease of 30,565 Mcf or 13.3% from 229,109 Mcf for the same period in

These oil and natural gas sales volume decreases are partially the result of severe winter storms in January 2024 that affected

Kansas and Texas and resulted in a curtailment of production on certain of the underlying properties, as discussed in the Trust’s

Current Report on Form 8-K filed on January 19, 2024.

The snow and ice associated with those storms disabled electrical power to the affected

underlying properties for an extended period, rendering some properties inaccessible, and generally created difficult working conditions.

Lease operating expenses were $7,220,002 for the six months ended June 30, 2024, a decrease of $440,185 or 5.7% from $7,660,187 for

the six months ended June 30, 2023.

Production and property taxes were $1,018,212 for the six months ended June 30, 2024, a

decrease of $155,230 or 13.2% from $1,173,442 for the six months ended June 30, 2023.

Such decrease is the result of a $129,024 decrease

in production taxes, primarily due to lower sales volumes and sales prices for oil and natural gas, and a $26,206 decrease in property

Development expenses were $805,577 for the six months ended June 30, 2024, a decrease of $224,895 or 21.8% from $1,030,472

for the same period in 2023.

Such decrease was primarily due to a decrease in development activity and drilling expenses during the six

months ended June 30, 2024, compared to the six months ended June 30, 2023, a period that included approximately $200,000 in

costs associated with the completion costs of two horizontal wells in Texas.

Lease operating expenses were $11,004,093 for the nine months ended September 30, 2024, a decrease of $209,285 or 1.9% from $11,213,378

for the nine months ended September 30, 2023.

Production and property taxes were $1,557,681 for the nine months ended September 30,

2024, a decrease of $273,245 or 14.9% from $1,830,926 for the nine months ended September 30, 2023.

Such decrease is the result of

a decrease of $201,827 or 24.1% in production taxes due primarily to lower sales volumes for oil and natural gas and a decrease of $71,418

or 7.2% in property taxes.

Development expenses were $1,504,651 for the nine months ended September 30, 2024, an increase of $178,208

or 13.4% from $1,326,443 for the same period in 2023.

Such increase was primarily due to increased development activity during the nine

months ended September 30, 2024, compared to the nine months ended September 30, 2023.

of revenues over direct operating expenses and lease equipment and development costs.

The excess of revenues over direct

operating expenses and lease equipment and development costs from the underlying properties was $8,726,971 for the six months ended June 30,

2024, a decrease of $1,961,521 or 18.4% from $10,688,492 for the six months ended June 30, 2023.

The Trust’s 80% net profits

interest of these totals was $6,981,577 and $8,550,794, respectively.

During the six months ended June 30, 2024 and 2023, VOC Brazos

did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve for future development, maintenance

or operating expenditures, which resulted in income from the net profits interest of $6,981,577 and $$8,550,794 for such periods, respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses of $691,577 and $499,764 for the six months ended

June 30, 2024 and 2023, respectively, and a Trustee holdback for future estimated Trust expenses of $231,030 for the six months ended

June 30, 2023.

The Trustee paid general and administrative expenses of $477,296 for the six months ended June 30, 2024, a decrease

of $134,132 from $611,428 for the six months ended June 30, 2023.

These factors resulted in distributable income of $6,290,000

for the six months ended June 30, 2024 and $7,820,000 for the six months ended June 30, 2023.

operating expenses and lease equipment and development costs from the underlying properties was $12,975,244 for the nine months ended

September 30, 2024, a decrease of $2,447,187 or 15.9% from $15,422,431 for the nine months ended September 30, 2023.

Trust’s 80% net profits interest of these totals was $10,380,195 and $12,337,945, respectively.

During the nine months ended September 30,

2024 and 2023, VOC Brazos did not withhold or release any dollar amounts due to the Trust from the previously established cash reserve

for future development, maintenance or operating expenditures, which resulted in income from the net profits interest of $10,380,195 and

$12,337,945 for such periods, respectively.

These amounts were reduced by a Trustee holdback for current estimated Trust expenses of $1,030,195

and $716,915 for the nine months ended September 30, 2024 and 2023, respectively, and a Trustee holdback for future estimated Trust

expenses of $231,030 for the nine months ended September 30, 2023.

The Trustee paid general and administrative expenses of $679,784

for the nine months ended September 30, 2024, a decrease of $188,864 from $868,648 for the nine months ended September 30, 2023.

These factors resulted in distributable income of $9,350,000 for the nine months ended September 30, 2024 and $11,390,000 for the

nine months ended September 30, 2023.

Liquidity and Capital Resources

7 unchanged sentences

by the Trustee) in that quarter, over the Trust’s expenses paid for that quarter.

Available funds are reduced by any cash

that the Trustee decides to reserve for future development, maintenance or operating expenses.

As of June 30, 2024, the Trustee held

Available funds are reduced by any cash that

the Trustee decides to reserve for future development, maintenance or operating expenses.

As of September 30, 2024, the Trustee held

$1,779,712 as cash and cash equivalents on the accompanying Statements of Assets and Trust Corpus, which includes the $1.175 million cash

3 unchanged sentences

If the Trust borrows funds, the Trust unitholders will not receive distributions until the borrowed funds are repaid.

During the three and six months ended June 30, 2024 and 2023, there were no such borrowings.

VOC Brazos has provided a letter of

credit in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay

future expenses.

the three and nine months ended September 30, 2024 and 2023, there were no such borrowings.

VOC Brazos has provided a letter of credit

in the amount of $1.7 million to the Trustee to protect the Trust against the risk that it does not have sufficient cash to pay future

From the first quarter of 2022 to the second quarter

of 2023, the Trustee withheld a portion of the proceeds otherwise available for distribution each quarter to gradually build a $1.175

of 2023, the Trustee withheld a portion of the proceeds otherwise available for distribution each quarter to build an approximately $1.175

million cash reserve for the payment of future known, anticipated, or contingent expenses or liabilities of the Trust.

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the impact on distributions of uneven capital expenditure timing.

The cash reserve balance was $1,000,000 at June 30, 2024 and 2023.

The cash reserve balance was $1,000,000 at September 30, 2024 and

Note Regarding Forward-Looking Statements

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and Results of Operations”, are forward-looking statements.

Although VOC Brazos advised the Trust that it believes that the expectations

reflected in the forward-looking statements contained herein are reasonable, no assurance can be given that such expectations will prove

to have been correct.

Although VOC Brazos advised the Trust that it believes that the

expectations reflected in the forward-looking statements contained herein are reasonable, such expectations may not prove to have been

Important factors that could cause actual results to differ materially from expectations (“Cautionary Statements”)

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements